David K. Taylor | BuildSmart
I have practiced law for 40 years, with the vast majority as a “construction” lawyer. I have seen great… and bad construction lawyering, both when on the other side of a dispute, as well as when serving over 300 times as a mediator or arbitrator in construction disputes. To be clear, I have made my share of mistakes. I learned from my mistakes and was lucky enough to have great construction lawyer mentors to lean on and learn from, and I try to a good mentor to young construction lawyers. Becoming a great construction lawyer is challenging, but the rewards are many. The following is mistake No. 3 of the top 10 mistakes I have seen lawyers make in construction disputes, and yes, I have been guilty of making the same mistake.
Mistake No. 3: Not Performing Due Diligence on the Mediator and/or Arbitrator
In almost all construction disputes (a higher percentage than commercial disputes) the claims are mediated, and, if unsuccessful, submitted to binding arbitration (either by agreement or via the dispute resolution clause in the construction contract). A mistake construction lawyers often make, both in mediation and especially in arbitration, is not doing sufficient due diligence and getting client “buy in” on the proposed agreed “neutral.” The client is relying on the lawyer’s expertise and experience to make a recommendation as to the neutral. When the client (the one paying the bills and his share of the neutral) turns and asks “Why did you recommend this person?” you had better have an answer.
Mediation
For construction mediations, the mediator should always be an experienced construction lawyer, even if the mediator is full or part time. Every construction mediator has his or her own style. You need to find out what that style is before making a recommendation to a client. The prior dispute experience level of your client is also a factor. Do you need a “basher/trasher” — a mediator who will not be concerned about bashing both sides (and yours) and expressing strong opinions about what a settlement should look like? Do you need a “Bill Clinton” type of mediator – someone who feels your pain but does not express a lot of opinions? Is your client listening to your thoughts on the case and you need the mediator to lay it out for the client? Is the other side’s lawyer NOT a construction lawyer? Even if she is, what do you know about the other side’s decisionmaker? Is it a bare knuckles fight to the end where a business is at stake, or a run-of-the-mill dispute after which the parties will still have a relationship? Careful thought should go into all of these factors before simply selecting your “go to” mediator or agreeing on the other side’s mediator recommendation. The best construction mediators are the ones who can alter their style to get to a deal. Great mediators say, “I don’t care if you ever use me again, my client is the deal, and I’ll do whatever it takes to get the deal.”
You have to do your own research. Discuss your choices with colleagues. Do a Google search for articles authored by or about the mediator you are considering (or proposed by the other side). And here is the most neglected action item: Call up the proposed mediator. Remember, this is a settlement, not arbitration. Ask about their style, how they manage difficult clients (and lawyers), and whether they have had the other side in a mediation before. How do they manage an impass when the parties are far apart? Do they require (which every good mediator should) a “pre-call” to make sure that both sides will be ready to mediate and suggest what needs to be exchanged prior to the mediation? Do they like to make a “mediator’s proposal” at the end if no deal? By obtaining as much information as you can, you and your client can make a better decision on who to pick as a mediator, which will increase your chances of a successful outcome.
Arbitration
Selecting an arbitrator is serious since the arbitrator’s final decision is binding and, with few exceptions, unappealable. Your client’s business and livelihood may be at risk. If the arbitration is “administered,” each side will get a list of potential arbitrators (with a bio) from the ADR agency. The selection process is like selecting a jury: Cross off unacceptable arbitrators, list the rest in order of preference, send the list back to the case administrator, and soon you are assigned an arbitrator (or a panel). You should involve your client, regardless of experience level. Not researching beyond the provided bios is a serious mistake. At the end of the day, you want someone who will “call balls and strikes” with no conflicts and who fits the needs of your dispute. For example, if you know the other side’s lawyer will want unlimited depositions and will be difficult, you want an experienced arbitrator who can control the difficult advocate. Most of the provided bios are old. While arbitrations are “private,” Google the arbitrators for presentations and articles. See who they normally represent as a construction lawyer. Reach out to colleagues to see if they have had this person as an arbitrator. What type of scheduling order do they prefer? Do they have a position on depositions and especially summary judgments (really called “dispositive motions”)? If you have case where there should be a good chance of kicking out all or some part of a claim or defense prior to a hearing, you do not want an arbitrator who never grants such motions. And while you call colleagues you trust, be careful with their advice. Many times, lawyers who have “lost” an arbitration say that the arbitrator was horrible and that you should stay away. The best choice may be the arbitrator whom a lawyer says was fair and allowed both sides to try their case even though the lawyer lost the case.
So, to avoid this mistake that I have made, make sure you do your due diligence in selecting any neutral and keep your client in the loop before making any final decisions.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.